The Hahns (owners of Conestoga Wood Specialties) have a right to exercise their

Question

The Hahns (owners of Conestoga Wood Specialties) have a right to exercise their religion. Does this right transfer to any corporations they own? Explain. (400 word reply)

This is the case that should be used to answer this question:

“Corporations and Religious Faith”

IN 2012 THE SUPREME COURT UPHELD MOST of the Affordable Care Act, President Obama’s signature health- care reform law. That law requires that employer-sponsored health care policies include contraceptive coverage. This is in line with a 2002 EEOC ruling that companies that provide pre- scription benefits to their employees but not birth control violate Title VII of the 1964 Civil Rights Act, which forbids discrimina- tion on grounds of sex. Although the Obama administration has exempted religiously affiliated nonprofit employers, such as Catholic charities, from financing contraceptive coverage, for- profit companies remain bound by the requirement.

Two for-profit companies, however, are challenging the rule— Hobby Lobby Stores, an arts-and-crafts chain, and Conestoga Wood Specialities, which makes kitchen cabinet doors. Based on their Christian religious beliefs, the owners of the companies oppose forms of contraception that prevent the implantation of a fertilized egg, such as the morning-after pill and various intrauterine devices. They believe that life begins when the sperm fertilizes the egg and that these forms of contraception are equivalent to abortion, violating the right to life of the fertilized egg by preventing it from attaching to the lining of the uterus. (Even without such forms of contraception, in the natural course of things fertilized eggs often fail to implant, so that pregnancy never occurs.)

In June 2013, the U.S. Court of Appeals, Tenth Circuit, upheld Hobby Lobby’s position. It ruled that a corporation, as a form of association, has a right to espouse its religious beliefs regard- less of its profit-seeking status. The Green family, who own the company, formed it with the “intent to provide goods and services while adhering to Christian standards as they see them, and they have made business decisions according to those standards.” The Court continued:

Would an incorporated kosher butcher really have no claim to challenge a regulation mandating non-kosher butchering practices? . . . A religious individual may enter the for-profit realm intending to demonstrate to the mar- ketplace that a corporation can succeed financially while adhering to religious values. As a court, we do not see how we can distinguish this form of evangelism from any other.

As the Court sees it, the owners of a company do not lose their right to follow their religious beliefs by incorporating, and it rejects the “notion that Free Exercise rights turn on Congress’s definition of ‘non-profit.’”

A month later, however, a different appellate court— the Third Circuit of the U.S. Court of Appeals—ruled against the Hahn family, who own Conestoga Wood Specialities, holding that “secular, for-profit corporations cannot engage in religious exercise.” Although the owners may have a sincere religious objection to contraceptives that act on the fertilized egg, the Court reasoned, the owners are not identical with the corporation; it is a distinct legal entity. The Affordable Care Act does not require the Hahns to do anything. The responsibility for complying with the act falls on the corporation.

“The fact that one person owns all of the stock does not make him and the corporation one and the same person, nor does he thereby become the owner of all the property of the corporation.” . . . The Hahn family chose to incorporate and conduct business through Conestoga, thereby obtaining both the advantages and disadvantages of the corporate form. . . . The free exercise claims of a company’s owners cannot “pass through” to the corporation.

The Court also rejected the contention that the Supreme Court’s 2010 ruling in Citizens United extended not just political rights but also religious rights to corporations.

In both cases, the courts were concerned not only with the First Amendment but also with the federal Religious Freedom Restoration Act (RFRA) of 1993. That law sought to nullify a high court ruling that the state of Oregon could deny unemployment benefits to people for using illegal drugs even if the drug in question (peyote) was being used as part of a Native American religious ceremony. The RFRA provides, as a general rule, that “Government shall not substantially burden a person’s exercise of religion.” It can restrict a person’s exercise of religion only if it has a compelling interest in doing so and if there is no less restrictive means of furthering that interest.

One key question, of course, is whether the law’s reference to “persons” encompasses for-profit companies. On that point, which clearly has implications for the rights of corporations that go beyond the Affordable Care Act, the two appellate courts differ. Now the Supreme Court must weigh in and decide for or against the two faith-based companies.

Explanation / Answer

Conestoga Wood Specialties is a company that is engaged in making wooden cabinets and wood specialty products. The Hahns owns the Conestoga Wood Specialties. The Hahn family is devout Christians and their faith and religion beliefs and values have taught them that it is against God's wish to take a human life while it is in the process of creation (i.e. a developing embryo) by giving drugs or administrating intrauterine devices to the pregnant woman. The religious beliefs of Hahn are that life begins when the sperm fertilizes the egg. Use of drugs like morning-after pills or use of different types of intrauterine devices is akin to taking a life while it is developing.

The context of the above issue is that under the Affordable Care Act, private companies have to offer birth control and pregnancy related services to their employees.

Now, the Hahns are religiously devout and are against providing birth control help to their female employees as it is against their (the owners) religious believes. But the owners cannot transfer or impose their religious beliefs and values to their company and their employees. This is due to the fact that Conestoga Wood Specialties is a separate legal entity. It is separate from the Hahns. The religious beliefs of Hahns are their own personal faith and interests. Their business is in the corporate form and hence should stand apart from the personal interest of Hahns. Exercise of religious believes cannot determine the way in which a corporation is run and operated.

Thus, the Hahns do not have the power or authority to transfer the right to exercise their religion to any of the companies owned by them.

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